If you want to enjoy the golden years of your retirement without any financial worries, you really shouldn’t put off planning your retirement.
Here are a few reasons why.
Over the 20th century, life expectancy has increased dramatically. While it’s definitely good news that we’re living longer, we need more savings to actually enjoy those extra years. Calculating our retirement has become even more urgent in the last few decades because as things stand now, the labour force (people aged 20-64) can no longer support the growing number of retirees.
Research on retirement has shown that if you want to maintain the lifestyle you’re accustomed to when you retire, your pension income should be at least equal to 70-80% of your last salary. In order to make sure you don’t fall into the pension gap, keeping this percentage in mind is key.
According to the World Bank, you can reach your pension goals if you use the "three pillar" system. This is how it works. The first pillar is your government pension (what you get from your Social Insurance Fund in Cyprus). The second pillar is your occupational pension, occasionally provided by employers. The third pillar is your private retirement saving plans and investments.
In Cyprus, your state pension is expected to cover about 40% of your last salary, though coverage is actually lower for higher pre-retirement salaries. This means that, if you want to live comfortably and avoid the pension gap, you’ll definitely need to supplement your pension income with income from the second and third pillars.
Life policy providers, like Ancoria, specialise in helping people get on track for a comfortable retirement. If you have any questions about your retirement needs or goals, contact one of our investment specialists today.